I know the NEC prohibits THHN for open wiring, requiring NM or UF instead. THHN must only be run in conduit or raceway.

But when my brother-in-law asked for the rationale behind this, I realized I had never contemplated such.

Anyone know the reasoning behind the rule?

 

I may be misremembering, but I think THHN is not encased. Your standard building wiring is essentially double insulated by the jacketing that covers it and the associated wiring for that circuit. I believe the protection given by the jacketing and the simple identification of the wiring makes for the requirement. If a house were done all in THHN, imagine trying to identify all three wires in any circuit.